What exactly is the vision here? Governments (which remember are elected by the people in democratic countries) abandon all control over the money supply? Collect taxes in Bitcoin? Or are we talking anarchy?
You need to think beyond just what governments can't do to how that plays out.
Now you're getting it.
Until not very many decades ago, governments couldn't print money out of thin air to pay for things. It's such a dangerous addiction. You get to pay for projects that people wouldn't be happy paying for, seemingly without cost... a free lunch. This has accelerated over the decades. Do you think the US tax payer would have subsidised the endless war in Afghanistan if they were paying for it through a special tax every pay check? That particular cost would have been $16,000 in extra taxes for each tax payer over it's lifespan. I'd guess that pointless war would have been over far sooner.
This ability to print causes gross misallocation of capital, there's no checks on government inefficiency. This completely distorts markets & actually causes lower growth rates which significantly negatively effects our standard of living over time. It also has the effect of stealing people's wealth in a completely hidden way, we don't know it's happening, just that things are getting more expensive, my savings are worth less, I'm not going to be able to retire until 70+ & and my standard of living is going to be less than my parents.
It also erodes democratic institutions. The politicians no longer have to persuade tax payers of the merits of spending their money on this or that, they just go around the tax payers completely & implement their projects with money secretly stolen from the future.
It actually hacks away at the foundation of civilisation, capital accumulation. It becomes harder, and eventually impossible, to accumulate capital to invest for the future.
A money that is beyond government manipulation, means the government will be more restrained. Wars will decrease because they simply won't be affordable.
This isn't 'anarchy', it's just making it harder for government to steal the wealth produced by the people.
They can still collect taxes, or impose sales taxes....it'll just be much more transparent. I'd predict that governments will shrink on a bitcoin standard back to their traditional roles: defence, policing, courts. Unconfiscatable money that teleports also means that governments can't trap capital within their borders. People will be able to move to whatever jurisdiction treats them best. Over the longer timeframe, this may mean nation states breaking up and there being many 1000s of city-states competing for our custom. You want a higher tax jurisdiction with a good social safety net, free schools & healthcare at point of use? You can move to that city-state and voluntarily agree to the tax burden. You want a bare-bones government that imposes minimal tax, but provides very basic services? Go there.
"Buying something in the expectation that it will increase in value in the future is exactly the behaviour of people investing in stocks, or buying commodities or real estate."
You are describing the behaviour of speculators/gamblers. IMO most investors are looking for a reasonable return from stocks and real estate, in the form of both income and capital growth, that is tied to economic growth. Many may never sell their investments.
BoE
Bitcoin is not an investment. It doesn't offer a return, it's not a part ownership of a business. 'A reasonable return in both income and capital growth' is playing semantics. People buy stocks in the expectation that they will be able to sell them for more at a future date, or that their total return will be more than their starting invested capital. That's it. It's a speculation, just further down the risk curve. You don't need to dress it up to pretend it's some noble enterprise. Investing seed money in a start-up or alongside VCs in series A or B is at least risking capital to try & start a new business. Buying shares in Unilever isn't risking capital to carry the economy forward or invest in new technology.
Bitcoin is a speculation, just like someone might buy copper futures in the expectation that the EV revolution is going to require a lot of copper & so push the price up. The copper doesn't offer income & capital growth.
Of course the space is full of degenerate gamblers, scammers, starry-eyed evangelists & all the rest. But, a sophisticated investor might realise that adding a small bitcoin position to their portfolio is a smart move based on past performance, they'll probably get a higher risk-adjusted return than a 100% equity, or traditional 60/40 portfolio.
H
